Justice News

Doctor and Clinic Owner Who Moved Fraud Operation from Florida to Detroit Convicted for Role in $2.3 Million Scheme

WASHINGTON - The owner of a Detroit-area medical clinic, Juan De Oleo, and a doctor who helped falsify files at the clinic, Dr. Rosa Genao, were convicted today by a federal jury in Detroit for their roles in a $2.3 million Medicare fraud scheme.

According to evidence presented during the two-week trial, Juan De Oleo owned a company called Xpress Center, Inc. (XPC), which was based in Livonia, Mich. Evidence showed that De Oleo and others established XPC for the sole purpose of defrauding Medicare. XPC was an outpatient clinic that purported to specialize in infusion and injection therapy. According to the evidence at trial, De Oleo and his co-conspirators imported the concept of "infusion" clinic fraud from South Florida to Detroit after increased law enforcement scrutiny in Florida. De Oleo enlisted his wife, Dr. Rosa Genao to help falsify medical files at XPC to make it appear that the clinic’s patients actually needed the medications being billed to Medicare. According to the evidence presented at trial, Genao wrote down fictitious symptoms in the patient charts maintained by the clinic in order to justify expensive and exotic medications that the clinic billed to Medicare. One of the exotic drugs, called octreotide, is used primarily in the treatment of acromegaly and severe diarrhea, and was billed by the clinic at several thousand dollars per dose.

As the evidence at trial showed, between approximately November 2006 and March 2007, the defendants submitted approximately $2.3 million in claims to Medicare for injection therapy services that were never provided and were not medically necessary. Medicare paid approximately $1.7 million of those claims.

Evidence at trial showed that XPC purchased only a small fraction of the medications that the clinic billed the Medicare program for providing. Patients were prescribed medications at the clinic based not on medical need, but rather on what medications were likely to generate the highest Medicare reimbursements.

Evidence at trial showed that Medicare beneficiaries were not referred to XPC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for those kickbacks, evidence showed that the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. Kickbacks came in the form of cash payments.

De Oleo was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and two counts of money laundering. Dr. Rosa Genao was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of destruction or alteration of records. The health care fraud and money laundering counts carry a maximum penalty of 10 years in prison and a $250,000 fine while the destruction of records count carries a maximum penalty of 20 years in prison and a $250,000 fine. A sentencing date has not yet been scheduled by the court.

Deirdre Teagan, a medical assistant who worked at XPC, was acquitted of one count of conspiracy to commit health care fraud and five counts of health care fraud. The jury was unable to reach a verdict on the destruction of records count, and the court declared a mistrial on that count.

Including today’s guilty verdicts, seven individuals related to XPC have been convicted for their roles in Medicare fraud schemes.

Today’s verdict was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

The case was prosecuted by Trial Attorneys Benjamin D. Singer and Gejaa T. Gobena of the Criminal Division’s Fraud Section. The FBI and HHS-OIG conducted the investigation.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals who collectively have falsely billed the Medicare program for more than $1.85 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.